The updated affiliate nexus rules in Minnesota for 2024 have significant implications for businesses with indirect ownership structures or digital operations:

• Indirect Control Relationships: By expanding the definition to include indirect control through ownership chains, businesses with complex corporate structures must carefully evaluate their affiliations to determine if nexus is established through multiple layers of ownership.

• Sales Threshold Focus: Eliminating the transaction count and relying solely on the $100,000 sales threshold simplifies nexus determination but requires businesses to closely monitor their revenue from affiliates to ensure they do not inadvertently meet the nexus criteria.

• Digital Goods and Services Inclusion: With click-through nexus now encompassing digital goods and services, businesses that sell digital products through affiliate links must assess whether their sales through affiliates contribute to meeting nexus thresholds, necessitating tax collection and remittance.

• Marketplace Facilitators Changes: Removing the transaction threshold for marketplace facilitators means they now solely rely on the $100,000 sales threshold, simplifying compliance but requiring precise sales tracking.

• Expanded Affiliate Activities: Including services like repair and installation in affiliate activities broadens the scope of what constitutes nexus, affecting businesses that provide ancillary services through affiliates.

• Compliance Adjustments: Businesses must adjust their compliance strategies to account for the broader definitions and ensure they are not inadvertently creating nexus through indirect ownership or digital sales activities.

• Documentation and Record-Keeping: Enhanced documentation practices are necessary to trace ownership relationships and accurately report sales data that may trigger nexus under the updated rules.

Overall, the updated affiliate nexus rules in Minnesota 2024 require businesses with indirect ownership structures or those engaged in digital operations to conduct thorough assessments of their relationships and sales activities. Ensuring compliance involves diligent monitoring of sales thresholds, understanding the expanded definitions of affiliate activities, and possibly adapting business models to manage or mitigate nexus establishment.